Help me automate my wholesaling processes....

Kenneth E. · 2013-01-03T08:58:59-08:00

Hey all. I am thinking about diving back into wholesaling this year on a more aggressive scale. My intent is to send more letters/postcards as well as follow-up with all potential deals (something I was lazy about doing previously). I am reaching out to the group to get some thoughts on automating my processes. Currently, I have a customized mailing list, simple mailers (letters and post cards) inviting sellers to call me (I have full time job so all calls go to “Google Voice” number where they leave a message) or visit my website to enter their information (which I will review and will get back to them). I call them back and schedule a property visit with all potential deals (screened against the criteria of my mentor who has 20 years experience and who I partner with 50/50 on the sale). Then, I negotiate with the seller. I am curious to know what processes you other wholesalers out there have for automating your businesses (for a relatively cheap price). I really only want to be involved in the creation of my lead lists and negotiating the price at the end. Basically, I only want to be involved in the beginning and end of the process. The main activities of my processes are broken down into the following: Developing mailing list. I’ll do this myself since this is the heart of everything for me. Automating the creation/sending of mailers. This is hugely time consuming for me to type or write the letters. What do you guys do? Hire interns? Pay spouses? Yellowletterscomplete.com? Any creative, cheap ideas on drip campaigns? Pros? Cons? Suggestions? Screening callers. I have a full time job and can’t answer during the day. Do you guys use answering services? Virtual Assistants? Any suggestions on the best way to automate this? I am thinking of having my google voice message refer all callers to my site where they can enter their own information so I don’t have to spend as much time calling people back and playing phone tag. My thoughts are maybe forwarding my google voice number to an answering service and having them simply enter the persons information into my website while on the phone with them. This means all roads will lead to my website. My website automatically sends submissions via email to me and my partners for immediate review. Scheduling appointments for property visit. Do you do this yourselves? Lead tracking. I kept notes on leads but never really had a decent way of tracking them. Any thoughts? Suggestions? I checked MQ's free lead tracking website but I am not entirely comfortable entering my lead information into the website of another wholesaler. How do you guys track leads? Do you do it yourselves? Do you have assistants do it? Lead follow up: How and when do you follow up with people who may be more motivated to sell in the future (ie following up with them in 3-4 months)? Any cheap ideas for tracking leads? Do you follow up with calls, emails, or letters? Negotiating. Only me. I won’t have anyone else negotiate with sellers. So, Im curious to see how others reduce the amount of time they spend IN their business….and make time to focus ON the business. I know all of this has been discussed in bits and pieces right here on BP, but im curious to see ‘whole systems’….if you guys are willing to share. Thanks!

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Steven Leigh, Thank you for your comments. You are right, I need to learn the process first and get my first deal done. All of my other rehab deals are done by MLS. That is a totally different story. Do you know where can I find an option to buy contract? Or I need to draft it from script?

0 Reply

Steven Leigh

Wholesaler · Dayton, OH · Member since 2016 · 252 posts · 227 votes

9y

Do you mean a purchase contract or something else? A purchase contract is what you use with the seller originally, then assign it to the end buyer with an assignment contract.

You can find most of the forms you need here on Bigger Pockets. Go to Tools and then FilePlace and search for what you need.

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Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Steven Leigh, I have purchase contract, got from Bigger Pockets. I want option to buy contract. I checked the Bigger Pockets FilePlace and can't find option to buy contract. Do you always use purchase contract, not option to buy contract? I was told that if the deal is not so good, it is better to use option to buy contract, instead of purchase contract. Thanks.

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Steven Leigh

Wholesaler · Dayton, OH · Member since 2016 · 252 posts · 227 votes

9y

Well the typical wholesaler purchase contract gives you a clause that if you back out of the deal they keep the earnest money as the sole liquidation of damages.

Having said that, don't enter into a deal with the intention that you might back out. Not only is it unethical but you could get into legal trouble or face fines if the city or county gets wind of it.

My recommendation is to make sure the numbers work before you sign. If they don't, just walk away. I had to back out of a deal early on because my numbers said it probably wouldn't work but I put it under contract anyway. I felt terrible and made their situation worse even though I was doing it to help them out.

I learned the hard way that if you're not sure the numbers work you should just walk away. Besides, by walking away you may just find that the seller chases you and then they are willing to come down on price and the numbers suddenly work.

1 Reply

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Steven Leigh, Thanks for your comments.So you only use purchase agreement with the earnest money as the sole liquidation of damages? How much earnest money you generally put with a house with ARV 150k?

0 Reply

Steven Leigh

Wholesaler · Dayton, OH · Member since 2016 · 252 posts · 227 votes

9y

Actually?.......none. :)

It usually never comes up. Sometimes the seller asks about it, in which case I usually suggest we do $10 earnest money to "make it official", but unless you mention it, the seller usually doesn't think of it and doesn't care.

That being said, I would go as high as $100 earnest money with the initial contract if a seller wanted something more substantial, but it hasn't really come up so far.

1 Reply

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Steven Leigh, nice to know.

When I buy house for rehab, I buy house with prices less than ARV*70%-repair value.

For the wholesale business, do you have some criteria to enter into a deal? If yes, would you please share your criteria in your market?

Thanks.

0 Reply

Steven Leigh

Wholesaler · Dayton, OH · Member since 2016 · 252 posts · 227 votes

9y

Generally it's 65-70% of ARV minus repair cost minus the fee I want to make by wholesaling it. Some of my buyers are willing to pay a little more than 70 in certain areas though.

1 Reply

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

Thanks for the useful information, @Steven Leigh

0 Reply

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

9y

I'm reminded of the moles in my yard, they have been really bad in this area this past year. The moles are pretty blind and chase the grubs, if they detect a meal in another direction that's where they head. They aren't efficient creatures at all, if they were, they wound plow through in a straight line some distance then turn around and head back next to their last run, like mowing a yard. Then they could clear an entire area and have all that was there. I'm glad they don't because the entire yard would be destroyed! So, they are blind and inefficient, often destroying the yard in their path.

What I'm seeing is new operators attempting to create a business with the efficiency of the mole, moving blindly in different directions, then this thread topic is to find ways to automate that activity.

As to technology, I go back to punch cards and readers, wiring boards, most here probably don't know what those are, but today I have an old desk job, 2 laptops, 2 notepads and my cell, hard to believe the progress. But, through all of the advances one thing still holds true, junk in, junk out.

I'm all for automating administrative tasks, client and customer lists, leads, document management, property files, accounting, inventory, expense estimates and bids, reference materials, market data, all well and good.

I'll say it again, dealing in real property is different than personal property, I've not seen a wholesaler on BP that can make those distinctions of the differences. What that really means is, bottom line, they don't really understand the business. That flows through your entire system, how you operate, manage and your business direction.

Sad part is, many, especially the youthful here, truly believe they understand the business, what they may understand is the game of buy low, sell high and profit, that's widget thinking, not really real estate.

Your attitude in business drives the path you take, your automation supports that path or function, errors in the attitude of business will carry through your process, activities and the automated support.

So, besides actually learning the real business of real estate as well as general business aspects, you need to take steps to build the foundation of your business first before you try to identify systems.

Do you even have a true business mission, or is it simply "I need to pull a deal and get some money before the end of the month"?

To accomplish your mission you need a strategy, to implement strategies you need to understand the tactics of the business, if some niche or tactic doesn't support the mission, you're spinning your wheels, wasting time and resources.

I can't tell you what the best automated resource might be for you to make phone calls or send out direct mail, but my question is, are you wasting time and resources on a function that may not be necessary.

In other words, if you really don't understand the proper structure and operations of using options, how can you set up a system to manage them? You can't, at least not effectively, so why take the path of the mole?

There are many repetitive functions to be accomplished in real estate, but as much as most of you want a step by step process to success, there isn't one, you can't automate judgment, variables of valuations, personalities, needs of your clients or customers, if you think technology manages such aspects you're wrong.

What is the real purpose of your "system automation" does it support ethical and legal practices to a business mission? Is it flexible, can you adapt to changes and details of a deal, to market conditions, to the necessary flow of work that must be required. If you don't know that flow or aren't aware of operational probabilities, the system won't work very well.

I'm sure there are some good administrative support systems out there, but they need to mesh with the needs of an organization or they can't organize that organization. Do you really understand what you need to do? A mole doesn't! :)

5 Reply

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Bill Gulley, thank you for your insightful comments. As a new investor, I agree that I am creating a business with the efficiency of the mole. Understanding a true business mission, resources, strategy for the success of the business is essential, before the business automation.

0 Reply

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

9y

@Grace Sunshine

Well, there is a bit of the cart before the horse, a catch 22, for a business. Not talking about the guy who just wants a few rentals to play with.

IMO, a mission should not be driven by money, you're in the real estate industry which already creates opportunity to make money, so to be driven to that is redundant. A mission might be to develop and redevelop neighborhoods, or to provide affordable housing or to rehabilitate housing to eliminate blight or strengthen community relations among apartment owners and tenants.....etc.

Real estate has a social impact, community purpose, aspects to improve and advance the highest and best use of land, starting out, what is it you want to accomplish?

You'll identify the market segment you're interested in, from there then appeal to the aspects of social impact, community, best use and develop strategies to acquire or control property to achieve a goal.

Then you can consider the type of entity needed, if any.

Now, the catch 22, what strategies might you be involved with? Understand the flow of work, the requirements, the admin support required. Then build the terms and conditions of the organization, set a business plan that can be managed keeping all the possible avenues of operations in mind. That means you need to understand the functions and strategies before you can develop an organization to manage a system of operation.

Once the organizational structure is identified, who does what, when, how, why, then you're ready to automate functions.

Wholesaling is not a good business model, set aside the ethical and legal issues, the basic ploy requires that you narrow your market, mostly to distressed owners, properties or both. If you come to some pretty house in a good area, there won't be much opportunity improve the property, the asking price and sale price will be closer to that shown in the market. If you're just a fast talker and mislead the little old lady, then basically you're attempting to steal equity, that has legal consequences and isn't good business. In other words, you're operating in the shallow end of the pool, you have a limited market. Now, look at the competition.

You first must understand real estate before you can value it properly and identify methods of increasing value. I can make money from buying a pretty house at market value, just needs to be the right property. If I'm looking for a deal, the market is wide open, I can look at anything out there. Your organization, business should be flexible enough to take on any strategy that can further the mission.

Most operators begin as one trick ponies, if they can't find the right show they can't perform. They also don't last in the business.

You'll notice that all the gurus selling push button systems are selling systems, not really knowledge in business or real estate, these are the step by steppers, targeting the naive, eager, uniformed with dreams and folklore.

Any system of operation you put in place must be flexible, it must adapt to market conditions, it needs to support a variety of controls to employ different methods, real estate is not a cookie cutter business. All people are different, that means every deal will be different, means to make things happen you need to adapt to change, solve different types of issues.

Look at the big picture, understand the basics of real estate, then adapt strategies that may be applied in almost any transaction with all kinds of properties and owners. Get to this point and you'll be successful.

Otherwise, your horse in the parade has blinders on and you'll miss out on most of the opportunities ahead. :)

5 Reply

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Bill Gulley, I cannot thank you enough for your comments. It is very helpful for the development of our business. I am taking a small business development class in a college and am writing my business plan. What you talked is exactly what our professor emphasized. Yes, Business is not only about earning money. It is related with our passion to help others ethnically, and to do the right thing.

I like your final statement:

"Look at the big picture, understand the basics of real estate, then adapt strategies that may be applied in almost any transaction with all kinds of properties and owners. Get to this point and you'll be successful. "

Thanks again for your effort and time to teach newbies like me. Biggerpockets became a good community because there are some one like you.

1 Reply

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

9y

Thank you @Grace Sunshine

Glad to hear you're taking the business development course!

An education is not about money, it's about a better quality of life for you and then the money follows.

This thread prompts me to write a blog on a method of organizing business functions, maybe.

In the Army, I was an Air Traffic Controller (ATC) (had several specialties).

If there is anything where organization, communication, flow of progress is critical, it would be in ATC!

Controllers use "flight strips" to track aircraft, back then they were thin paper strips that slid into a holder and the holder was laid on a rack that was tilted back so that if you took the bottom holder off the rack, (like that plane landed) the rest would slide down and you'd then work the next in line. We'd get busy and you'd rack'em and stack'em! Today, flight strips are on a computer screen, just marking the strip with one of those magic pens, but the method is still the same.

BTW, the system is still used, what happens when your computer crashes or you lose power, are you out of business? Don'y you hate when you order a burger and the register is down, they can't even figure tax and cost or make change! There is something to be said for ink on paper!

When I opened my mortgage company we didn't have software systems for lending operations as the cost was in the tens of thousands of dollars, hey, that money has a better use!

So, I adopted the flight strip method to my mortgage operations. By looking at a board I could tell the current status of any application in process.

Here are images of ATC Flight Strips:

https://www.google.com/search?q=atc+flight+strips&...

Look at the strips and you'll see boxes, identifying information goes in the larger boxes and other boxes represent certain functions or requirements, like information conveyed to a pilot, after giving the local weather you'd check the weather box. Task completed!

I rearranged some boxes, to make notes and other boxes represented a processing function, when the appraisal was in, the appraisal box was simply checked. If verifications had been received, that box was checked off. Title work ordered and received, check.

Boxes were organized on the strip according to the flow of work required, from a completed application to settlement appointment to when the check arrived from the title company.

You'll notice in the images that some boxes have a line dividing the box into two areas, the top are has a check when, say title was ordered, the bottom area, when title was received. This saves space on the strip, knowing what each box represents then only requires a check mark to indicate the status of that function, in process was empty, completed was checked.

Starting off, I could sit at my desk, look at my board (rack) and very quickly know the status of all my loans in process. Realtors would call asking about the status of a loan, I could immediately begin talking to them, look at the strip and give them the full status.

Now, can you imagine what these Realtors were thinking? Hey, Bill is on top of my deal, he knew instantly that the appraisal wasn't in yet, he wasn't like the loan officers who put me on hold to pull up a computer screen or chase down a loan file! He knew, on the spot!

Your organizational management can make you look very good to your customers and clients, the impression they get from a quick response is that you're on top of their deal, as if they are your only customer or client. Personal service, that's how you build a real estate operation.

Good luck :)

0 Reply

Grace Sunshine

Investor · Mandeville, LA · Member since 2016 · 46 posts · 7 votes

9y

@Bill Gulley，thank you for the great blog article. From your article, I agree that method of organizing business functions is important for both mortgage and real estate business. We need a system to track the staus for each lead. I have created a podio database using the methods mentioned by struggling investor. It works good so far. It allows me to track down the status of each lead. Of course, the mission statement, the business goal, and the strategy are the foundation for the success of a business. Thanks again for the advice.

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Help me automate my wholesaling processes....

Help me automate my wholesaling processes....

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